My company is experiencing increasingly worse losses. Should I consider a voluntary administration or a voluntary winding up?
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Answer by Kelly Angus, Adelaide 5000 SA
- If you believe your company has a chance of recovering from its financial difficulties and becoming profitable again you may seek the appointment of a voluntary administrator to take control of your company’s affairs.
- Upon their appointment a moratorium or stay of claims against your company will come into effect.
- If the voluntary administrator believes your company is recoverable the administrator may propose that a deed of company arrangement be entered into or that control of your company’s affairs be returned to you.
- However if the administrator believes that your company’s financial health cannot be restored the administrator may propose that your company enter into liquidation.
- If your company’s financial position is hopeless and beyond recovery you should take steps to wind up your company through the liquidation procedure.
- If your company is in financial distress you should seek professional legal and accounting advice promptly to learn more about your options and help you to make an informed decision.